Money sent home binds families, nations

December 04, 2003|By Roberto Suro

ACROSS THE United States, about 6 million immigrants from Latin America dispatch remittances on a regular basis.

Every payday, they scrape together a few hundred dollars from some of the most meager incomes in our economy and send the money to siblings, parents or children they may not have seen for years. Added up, these individual acts of generosity will come to about $30 billion this year.

All the indicators suggest that the quickly growing remittance traffic in the Western Hemisphere has crossed a threshold both in magnitude and significance.

Nearly one-fifth of the adults in Mexico and more than a quarter in El Salvador receive remittances, according to studies conducted jointly by the Pew Hispanic Center and the Inter-American Development Bank.

And it is not just the poor who are getting this money. In Mexico, remittances are going to every sector of society. Overall, the receivers are concentrated among those who are just a step or two ahead of poverty and who would slip back if not for their relatives' generosity. Clearly, remittances are a critical factor in the economic future of the receiving countries.

In the United States, 42 percent of adult foreign-born Hispanics send money home regularly, according to the 2003 National Survey of Latinos conducted by the Pew Hispanic Center and the Kaiser Family Foundation. The most recently arrived, those in the United States less than five years, are the most likely to be senders. They are also the most frequent remitters, with three-quarters dispatching money at least once a month.

Indeed, the ability to send money home seems an increasingly important reason for people to come to the United States, and so remittances are clearly a factor in this nation's demographic future.

"What he sends us every two weeks is enough that I know I can pay the bills," said a woman who participated earlier this fall in a focus group of remittance receivers in Mexico City. She and her husband both work steadily, but their earnings are not enough to sustain their extended family. A son in the United States makes up the difference. He left Mexico two years ago, not only because he was frustrated at the kind of work that was available to him but also because he worried about the problems his family faced.

The mother recalls being upset and arguing against her son's decision to leave. She also remembers their parting: "When he left, he told me, `Don't worry, I'll send you money, as much as I can.' And he always has."

Like that mother, about half of the Mexicans receiving remittances from someone who left in the past five years said they had an upfront commitment. The economic impact of such remittance flows is magnified by their constancy.

Foreign investors shy away from developing countries during times of economic or political instability. Likewise, a recession in the United States can dry up capital flows. But remittances, which are driven by deep emotional bonds, keep coming -- even increase -- during hard times. As a result, they are a remarkably stable source of earnings for Latin America.

Our studies show that remittance flows were largely unaffected by the U.S. economic downturn of 2001-2002. In every country except El Salvador, more than half of the recipients reported that they had started getting money from relatives abroad over the past three years.

In our survey of the Mexican population, 19 percent of all adults, representing about 13.5 million people, answered positively when asked, "Are you thinking about emigrating to the United States?"

That average, however, masked some substantial differences. Men, the young and Mexicans living in the areas that have traditionally sent large numbers of migrants north were more likely to say they were thinking about emigrating. Interestingly, there were no significant differences according to education and income.

The most notable characteristic associated with those who responded positively, however, was that they are remittance receivers. Among those getting money from a relative abroad, 26 percent said they had migration in mind. Focus groups with remittance receivers left little doubt that they considered coming to the United States a ready solution to unexpected economic problems -- including a sudden loss of their remittance income.

These families have created a bond of interdependence that jumps across borders. It is a bond of economic integration between the United States and Latin America that operates with little regard to governments or banks or corporations. And this bond is now powerful enough to change the course of all the nations it connects.

Roberto Suro is director of the Pew Hispanic Center, a project of the University of Southern California Annenberg School for Communication.